DETROIT EDISION COMPANY, et al. v. MICHIGAN PUBLIC SERVICE COMMISSION

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DETROIT EDISION COMPANY,
et al. v. MICHIGAN PUBLIC SERVICE COMMISSION

January 20, 1998
Nos. 187387, 187388

DETROIT EDISION COMPANY,

Appellant/Cross-Appellee,

and

ATTORNEY GENERAL,

Appellee/Cross-Appellant,

v

MPSC

MICHIGAN PUBLIC SERVICE COMMISSION, LC Nos. U-10143, U-10176

Appellee/Cross-Appellant,

and

DOW CHEMICAL COMPANY, MICHIGAN ELECTION

COOPERATIVE ASSOCIATION, ASSOCIATION OF

BUSINESSES ADVOCATING TARIFF EQUITY,

and CONSUMERS POWER,

Appellees.

Nos. 189396, 189397

DOW CHEMICAL COMPANY,

Appellant,

v

MPSC

MICHIGAN PUBLIC SERVICE COMMISSION, LC Nos. U-10143, U-10176

ATTORNEY GENERAL, ASSOCIATION OF

BUSINESSES ADVOCATING TARIFF EQUITY,

CONSUMERS POWER COMPANY, and DETROIT

EDISON COMPANY,

Appellees.

Nos. 189480, 189481

CONSUMERS POWER COMPANY,

Appellant,

v

MPSC

MICHIGAN PUBLIC SERVICE COMMISSION, LC Nos. U-10143, U-10176

ATTORNEY GENERAL, ASSOCIATION OF

BUSINESSES ADVOCATING TARIFF EQUITY,

DETROIT EDISON COMPANY, and DOW

CHEMICAL COMPANY,

Appellees.

Nos. 189503, 189504

ASSOCIATION OF BUSINESSES ADVOCATING

TARIFF EQUITY,

Appellant,

v

MPSC

MICHIGAN PUBLIC SERVICE COMMISSION, LC Nos. U-10143, U-10176

ATTORNEY GENERAL, DETROIT EDISON

COMPANY, CONSUMERS POWER COMPANY,

and DOW CHEMICAL COMPANY,

Appellees.

Before: Michael J. Kelly, P.J., and Reilly and Jansen, JJ.

PER CURIAM.

In these consolidated cases, appellants Detroit Edison Company
(Edison), Dow Chemical Company (Dow), Consumers Power Company
(Consumers), and the Association of Businesses Advocating Tariff
Equity (ABATE) claim appeals from an order entered on June 19,
1995 by the Michigan Public Service Commission (PSC) establishing
a framework for an experimental retail wheeling program for
Edison and Consumers. The Attorney General has filed a claim of
cross-appeal in Edison’s appeal. We affirm in all respects.

In 1992 ABATE sought approval of an experimental retail
wheeling tariff for Consumers. The term "retail
wheeling" refers to a local utility’s delivery of power to a
customer, also referred to as an end-user, in its service
territory. Retail wheeling differs from traditional, full service
electric service in that the customer arranges for the purchase
of its own power. That power is transmitted to the customer
through the local utility’s system. The entity that sells the
power to the customer is known as a third-party provider.

A contested case hearing was held on the application, and on
August 27, 1993 the hearing referee issued a proposal for
decision. The hearing referee recommended that retail wheeling
programs be allowed to go forward only if the customer’s local
utility voluntarily agreed to provide retail wheeling services.
The hearing referee concluded that although the PSC’s statutory
authority to regulate electric service did not include the power
to compel a utility to provide retail wheeling service, the PSC
had the authority to approve rates, terms, and conditions of
retail wheeling service. In addition, the hearing referee
rejected the contention that the PSC’s authority over retail
wheeling activities had been preempted by federal law.

In an interim order entered on April 11, 1994, the PSC
addressed substantive issues and approved certain terms and
conditions of an experimental retail wheeling program for
customers located in the territories served by Consumers and
Edison. The PSC reopened the record and remanded the case to the
hearing referee for the limited purpose of determining rates and
charges.

The PSC concluded that existing state law allowed it to
authorize the utilities’ participation in a retail wheeling
program. The PSC relied on the Electric Transmission Act, 1909 PA
106, MCL 460.551 et seq.; MSA 22.151 et seq. (Act
106), the Public Service Commission Act, 1939 PA 3, MCL 460.1 et
seq.; MSA 22.13(1) et seq. (Act 3), and the Railroad
Act, 1909 PA 300, MCL 462.2 et seq.; MSA 22.21 et seq.
(Act 300), which it found provides comprehensive authority to
establish rates, terms, and conditions of retail service. The PSC
concluded that approval of an experimental program would not
intrude on a utility’s authority to manage its operations related
to power production and procurement.

The PSC rejected the assertion that its authority to implement
an experimental retail wheeling program was preempted by federal
law. Noting that the Federal Power Act (FPA), 16 USC 824 et
seq., administered by the Federal Energy Regulatory
Commission (FERC), established the basis for federal authority
over the transmission and wholesale sale of electric power in
interstate commerce, the PSC concluded that while § 201(b)(1) of
the FPA, 16 USC 824(b)(1), provided for FERC jurisdiction over
the transmission and sale of electric energy in interstate
commerce and over all facilities for such transmission and sale,
it did not give FERC jurisdiction over facilities used for
generation of electric power or facilities used in local
distribution or only for the transmission of electric energy in
intrastate commerce. The PSC concluded that under this framework,
the regulation of rates, terms, and conditions of retail electric
service provided by a local utility to a customer within its
territory was a function of local distribution. Furthermore, the
PSC found that amendments to the FPA, added by the Energy Policy
Act of 1992, further clarified the jurisdictional framework.
Section 212(g), 16 USC 824k(g), provided that no FERC order could
be inconsistent with a state law governing the retail marketing
areas of electric service. The PSC found that by enacting §
212(g), Congress intended that states would have the final word
on whether a retail wheeling program would be authorized. Section
212(h), 16 USC 824k(h), prohibited the FERC from issuing an order
requiring the transmission of electric energy directly to an
ultimate consumer. The PSC concluded that under § 212(h), the
FERC could not mandate a retail wheeling program.

The PSC concluded that third-party providers engaging in sales
of power to retail wheeling customers would be required to obtain
a certificate of public convenience and necessity (CPCN) pursuant
to 1929 PA 69 (Act 69), MCL 460.501 et seq.; MSA 22.141 et
seq., before a transaction could occur. The PSC observed that
the purpose of Act 69 was to determine that any duplication of
services was in the public interest. The PSC rejected the
assertion that the definition of "public utility"
encompassed only entities with facilities located in Michigan.

The PSC concluded that a third-party provider would be
required to obtain a franchise for the municipality in which the
customer was located. The PSC based its conclusion on the
language of Const 1963, art 7, § 29, which states that a party
operating a public utility must obtain a franchise if it seeks to
use the highways, streets, alleys, or other public places in the
municipality, or if it seeks to transact a local business within
the municipality.

In a decision on remand entered on June 19, 1995, the PSC
established rates and addressed issues raised on rehearing and
during the remand phase. The PSC determined that the experiment
should go forward under the framework established in the interim
order, and concluded that the various rate determinations, viewed
individually or as a whole, were just and reasonable. The PSC
specifically concluded that capacity reservation charges, which
recover the costs of using the local utility’s transmission and
distribution facilities to provide retail delivery service, were
to be calculated using an embedded cost approach.

The PSC concluded that it did not err in holding that Act 69
and franchise requirements would apply to third-party providers
during the retail wheeling experiment. The PSC rejected the
assertion made on rehearing by ABATE and Dow that National
Steel Corp v Public Service Comm, 204 Mich App 630; 516 NW2d
139 (1994), established that Act 69 did not apply to private,
voluntary purchases involving one or only a few buyers. The PSC
distinguished National Steel Corp, supra, on the
grounds that in that case the customer, National Steel, owned the
pipeline that was used to transport the gas. The provider was not
a public utility. In addition, the PSC also rejected ABATE’s
attempt to analogize retail wheeling to the natural gas industry.
The pre-existing structure of the gas industry made unbundling of
services easier, whereas competition in the electricity business
could lead to wasteful duplication and uneconomic investment.
Such risk would be addressed under Act 69. Recognizing that
complying with Act 69 could pose practical difficulties,
especially in the context of a limited experiment, the PSC
determined that it would allow each utility to file an
application for a blanket CPCN for its program. A blanket CPCN
would confer approval required under Act 69 for all sales by
third-party providers to retail wheeling customers.

The standard of review for PSC orders is narrow and well
established. Pursuant to MCL 462.25; MSA 22.44, all rates, fares,
charges, classification and joint rates, regulations, practices,
and services prescribed by the PSC are presumed, prima facie, to
be lawful and reasonable. Michigan Consolidated Gas Co v
Public Service Comm, 389 Mich 624, 635-636; 209 NW2d 210
(1973). A party aggrieved by an order of the PSC bears the burden
of proving by clear and convincing evidence that the order is
unlawful or unreasonable. MCL 462.26(8); MSA 22.45(8). Courts
must defer to the PSC’s administrative expertise. Attorney
General v Public Service Comm, 206 Mich App 290, 294; 520
NW2d 636 (1994).

The PSC’s Statutory Authority to Authorize
Retail Wheeling

Edison, Consumers, and, on cross-appeal the Attorney General,
argue that the PSC had no authority to implement a retail
wheeling program. They contend that nothing in Act 106, Act 3, or
Act 300 authorizes the PSC to implement retail wheeling. The PSC
has only those powers conferred on it by the Legislature. Union
Carbide v Public Service Comm, 431 Mich 135, 146; 428 NW2d
322 (1988). Compelling a utility to participate in retail
wheeling would relieve that utility of the obligation to supply
an existing customer with power from its own resources. The PSC
exceeds its authority by ordering a utility to engage in specific
management practices or to enter or not enter into any particular
contract. Consumers Power Co v Public Service Comm, 189
Mich App 151, 180; 472 NW2d 77 (1991).

We hold that the PSC has the statutory authority to authorize
an experimental retail wheeling program. While the PSC has only
those powers conferred on it by the Legislature, Union Carbide,supra, the interpretation given to statutes by the agency
charged with applying them is entitled to great deference. In
re Quality of Service Standards for Regulated Telecommunication
Services, 204 Mich App 607, 612; 516 NW2d 142 (1994). The PSC
did not cite to specific sections of Act 106, Act 3, or Act 300
when concluding that those statutes authorize it to implement an
experimental retail wheeling program; however, an examination of
various provisions of those statutes demonstrates that they
support the PSC’s decision. Section 2 of Act 106, MCL 460.552;
MSA 22.152, gives the PSC "control and supervision of the
business of transmitting and supplying electricity . . . ."
Supplying electricity must be deemed to include the act of
delivering same to a customer. Section 6 of Act 106, MCL 460.556;
MSA 22.156, allows the PSC to order service to be rendered in any
case in which such an order is reasonable. Section 6(1) of Act 3,
MCL 460.6(1); MSA 22.13(6)(1), authorizes the PSC to regulate
services and conditions of service. While this section does not
contain a grant of specific powers, it construes the extent of
the PSC’s jurisdiction and grants the PSC broad authority. Attorney
General v Public Service Comm, 122 Mich App 777, 786-787; 333
NW2d 131 (1983). Under Act 300, the PSC possesses the same
authority over utilities as did the Railroad Commission over
railroads. Union Carbide, supra, 431 Mich at 156.
Section 22 of Act 300, MCL 462.22; MSA 22.41, authorizes the PSC
to investigate and order adequate service to be rendered.

The PSC’s order authorizing an experimental retail wheeling
experiment does not infringe on the right of Edison and Consumers
to control their management activities. In Huron Portland
Cement Co v Public Service Comm, 351 Mich 255, 266; 88 NW2d
492 (1958), our Supreme Court held that § 6 of Act 106 did not
authorize the PSC to order Consumers to deliver electric current
to a locale through which its lines did not pass. In the instant
case, the PSC’s order does not require Edison or Consumers to
construct new facilities. In Detroit Edison Co v Public
Service Comm, 221 Mich App 370, 386-389; 562 NW2d 224 (1997),
this Court held that the PSC’s modification of Edison’s proposed
demand-side management program constituted an impermissible
infringement on Edison’s management prerogatives. Here, the PSC
has not modified any proposal put forth by Edison or Consumers,
and has not compelled either utility to engage in any specific
management practice.

Moreover, the PSC’s order authorizing retail wheeling does not
compel Edison or Consumers to enter into any particular contract.
Any arrangement made by a customer for the purchase of power to
be transmitted via either utility’s lines must be approved in
advance by the PSC. While the experimental program will require
Edison and Consumers to transmit power purchased by a customer
from a third-party provider, the PSC’s order does not compel
either utility to provide service to a customer it does not
currently serve. Requiring Edison and Consumers to unbundle
operation and transmission services is not equivalent to ordering
that new facilities be constructed or that an existing facility
cease operations. Cf. Huron Portland Cement Co; Union
Carbide, supra. The PSC’s order does not dictate the
substance of management decisions, and thus is not unlawful or
unreasonable.

Federal Preemption

Edison argues that the PSC’s authority to implement a retail
wheeling program is preempted by federal law. Section 201(b)(1)
of the FPA, 16 USC 824(b)(1), grants the FERC jurisdiction over
both the "transmission of electric energy in interstate
commerce," and the facilities for such transmission. Even
transmission that occurs over local distribution facilities is
subject to federal jurisdiction if the transmission also flows
over interstate facilities at some point. Consolidated Edison
Co, 15 FERC ¶61,174, pp 61, 405 (1981). Edison notes that
its electric transmission facilities are connected to facilities
in other states; therefore, interstate electricity is commingled
across its facilities. The PSC’s assertion of jurisdiction must
yield to the FERC because jurisdiction over interstate commerce
cannot be divided. Mississippi Power & Light Co v
Mississippi ex rel Moore, 487 US 354; 108 S Ct 2428; 101 L Ed
2d 322 (1988).

We disagree with Edison’s argument. Congressional intent
determines whether federal law preempts state law. A federal
agency cannot go beyond its authority to preempt state law. Louisiana
Public Service Comm v Federal Communications Comm, 476 US
355, 374; 106 S Ct 1890; 90 L Ed 2d 369 (1986). While it is
undisputed that pursuant to § 201(b)(1) federal regulation
extends to transmission of electric energy in interstate
commerce, § 201(b) also establishes that the FERC does not have
jurisdiction over local distribution facilities. The 1992
amendments to the FPA, particularly §§ 212(g) and (h), 16 USC
824k(g) and (h), prohibit the FERC from issuing any order
inconsistent with any state law governing retail marketing areas
of electric utilities, or from requiring the transmission of
electric energy to any ultimate consumer.

FERC Order 888, 61 Fed Reg 21540 (1996), and Order 888-A, 62
Fed Reg 12274 (1997), establish that the issue of federal versus
state jurisdiction over retail wheeling programs is complex and
not yet totally settled. In Order 888 the FERC declined to
address the specific issue of whether states have the authority
to order retail wheeling. The FERC did not deviate from this
position in Order 888-A. That order acknowledged that some states
have implemented retail wheeling, and anticipates that more
states will do so. The FERC indicated that while it retains
jurisdiction over transmission of electric energy in interstate
commerce, it will give deference to tariffs filed with and
approved by states as a result of implementation of retail
wheeling programs.

More recent authority, Consumers Energy Co, 80 FERC
¶61,121 (1997), lends further support to the conclusion that
federal law does not preempt the PSC’s authority to authorize
retail wheeling. In this order, the FERC dismissed a retail
direct access tariff submitted for filing by Consumers Energy
because it was a tariff for the use of local distribution
facilities in a retail wheeling program, and not for the use of
transmission facilities in interstate commerce. The order
recognized that the FERC retains jurisdiction over transmission
facilities used in interstate commerce, while jurisdiction over
local distribution facilities remains with the state.

Federal statutory and FERC authority indicate that the FERC
has not precluded states from implementing retail wheeling
programs; the PSC’s order holding as much is not unlawful or
unreasonable.

Certificate of Public Convenience and
Necessity

Dow and ABATE argue that Act 69, MCL 460.501 et seq.;
MSA 22.141 et seq., does not require a third-party
provider to obtain a CPCN before it can engage in a retail
wheeling transaction either with an unaffiliated customer or with
an affiliated entity. Retail wheeling does not involve the sale
of energy to the public. National Steel Corp, supra,
establishes that the requirements of Act 69 do not apply to
private, voluntary purchases of energy involving one or only a
few buyers. Regulating a third-party provider in a retail
wheeling context is not in the public interest and serves no
public policy function. Because a retail wheeling contract is a
private transaction, requiring a third party provider to obtain a
CPCN would not further Act 69′s goal of avoiding wasteful
duplication of services.

Furthermore, Dow and ABATE contend, a third-party provider
need not obtain a franchise from a municipality where its retail
customer or affiliated entity is located. A third-party’s sale of
power to a customer located in a host utility’s service area does
not constitute the carrying on of a local business under MCL
460.502; MSA 22.142. Because a third-party provider need not
obtain a CPCN, it need not obtain a franchise.

We hold that Act 69 requires a third-party provider to obtain
a CPCN before engaging in retail wheeling. Section 1 of Act 69,
MCL 460.501; MSA 22.141, defines a "public utility" as
a person or corporation "owning or operating in this state
equipment or facilities for producing, generating, transmitting,
delivering or furnishing gas or electricity . . . to or for the
public for compensation." Section 2 of Act 69, MCL 460.502;
MSA 22.142, provides that "[n]o public utility shall . . .
render any service for the purpose of transmitting or carrying on
a local business either directly, or indirectly" without
first obtaining a CPCN. A third-party provider, even one located
outside Michigan, meets the definition of "public
utility." A contract for the sale of power falls under the
definition of "facilities" in § 501. Hartford
Electric Light Co v Federal Power Comm, 131 F2d 953 (CA 2,
1942). The absence of a third-party provider’s plant or system in
the territory in which the customer or affiliated entity is
located does not relieve the provider of the obligation to obtain
a CPCN. In In re Alpena Power Co, 111 PUR 4th
458 (1990), a customer in the Village of Hillman, located in
Alpena Power Company’s territory, constructed a pipeline to
connect with Consumers Power’s line outside the village limits.
Consumers supplied backup power to the single customer at the
point of connection. The PSC held that Consumers was required to
obtain a CPCN. While not a retail wheeling case, the rationale ofAlpena Power Co, supra, supports the PSC’s
decision. By requiring a third-party provider to obtain a CPCN
notwithstanding the fact that its physical facilities do not
invade the host utility’s service area, the PSC can prevent the
duplication of arrangements for the sale of power and preclude
uneconomic involvement.

A retail wheeling contract is not a private transaction; thus,National Steel Corp, supra, is distinguishable. In
that case, National Steel sought to transport natural gas to its
own facility over its own pipeline. The pipeline was to be built
and operated by Novacorp. This Court held that neither entity was
required to obtain a CPCN because the transaction did not involve
a sale to the public. Id. at 635-636. In a retail wheeling
transaction, including a sale to an affiliated entity, the
ability of a third-party provider to deliver electric power to an
end-user would be dependent on an integrated system of
generation, transmission, and distribution facilities. The
end-user does not control all of those facilities. Rather, the
facilities are owned by public utilities, were constructed with
the aid of utilities’ eminent domain power, have monopoly
characteristics, and are highly regulated. Each transaction in
the PSC’s retail wheeling experiment will require extensive use
of public utility facilities.

We reject as unpersuasive any attempt to analogize retail
wheeling of electric power to the natural gas industry. Such an
attempt fails to recognize fundamental differences between the
industries. The FERC comprehensively regulates the natural gas
industry, and has the authority to issue CPCNs in that industry.
Act 69 is preempted in that area. Michigan Consolidated Gas Co
v Panhandle Eastern Pipe Line Co, 887 F2d 1295 (CA 6, 1989).

Const 1963, art 7, § 29 requires a party operating a public
utility to obtain a franchise if it seeks to use the highways,
streets, or other public places in the municipality, or if it
seeks to transact a local business within the municipality.
Section 3 of Act 69, MCL 460.503; MSA 22.143, requires an
applicant for a CPCN to first obtain a franchise from the
municipality in which it desires to operate. Given our conclusion
that a third-party provider is a public utility and is required
to obtain a CPCN before engaging in a retail wheeling
transaction, it follows that a third-party provider must also
first obtain a franchise.

Regulation of third-party providers is in the public interest
and serves a legitimate public policy function. The PSC’s order
authorizes a five-year experimental retail wheeling program. A
principal purpose of the experiment is to determine whether the
use of retail wheeling will result in more and better
competition. For that reason, the PSC must be able to track the
arrangements made by customers and to collect data to evaluate
the experiment. Allowing third-party providers to work without
regulation would thwart the PSC’s efforts. The PSC, recognizing
that complying with Act 69 could cause practical difficulties,
has provided for the filing of an application for a blanket CPCN.
A blanket CPCN would apply to all sales of electric power made by
a third party provider. We defer to the PSC’s administrative
expertise in constructing the experiment. Yankoviak v Public
Service Comm, 349 Mich 641, 648; 85 NW2d 75 (1975).

Constitutional Issues

Taking

Edison and Consumers argue that the PSC’s order implementing
retail wheeling takes their property without just compensation
because it compels them to accept power provided by a third-party
and to transport that power via their systems. This power would
physically occupy their systems, and reduce their ability to use
their systems for their own purposes. Such a physical invasion
constitutes a taking of property. Loretto v Teleprompter CATV
Corp, 458 US 419; 102 S Ct 3164; 73 L Ed 2d 868 (1982).
Moreover, the PSC’s order violates US Const, Ams V and XIV in
that it requires utilities to involuntarily devote their property
to a new business and to expand their services beyond those they
had been willing to undertake.

We disagree. A public utility is subject to extensive
regulation. Michigan law has long required regulated companies to
connect their equipment and services with those of other
providers. Because a public utility is a regulated entity and its
property is used for a public purpose, such reasonable
interference is not unconstitutional. See, e.g., Michigan
State Telephone Co v Michigan Railroad Comm, 193 Mich 515;
161 NW 204 (1916). Moreover, in Energy Ass’n of NY v Public
Service Comm of NY, 169 Misc 2d 924 (1996), the court held in
dictum that requiring utilities to carry competitors’ electricity
did not constitute a taking. While not binding, we find this
authority supportive of the PSC’s decision.

The reliance by Edison and Consumers on cases such as Loretto,supra, and Bohn Lumber Products v Public Service Comm,
317 Mich 174; 26 NW2d 875 (1947), is misplaced. In Loretto,supra, the Supreme Court held that a requirement that
private landlords allow cable television companies to attach
equipment to their properties constituted a taking of the
property. In Bohn, supra, our Supreme Court held
that a railroad could not be compelled to renew or continue a
lease of property to a customer. A public utility is not
analogous to a private landlord because a utility’s property is
regulated and used for the public benefit.

The PSC’s order establishes that Edison and Consumers will be
compensated for their participation in any retail wheeling
arrangement. The utilities have not shown that the PSC’s order is
unlawful or unreasonable.

Contract Clause Violation

Consumers argues that the PSC’s order authorizing retail
wheeling violates the impairment of contract clause in the United
States Constitution, US Const, art I, §10, and in the Michigan
Constitution, Const 1963, art 1, §10. Consumers contends that
the PSC’s order forces it to use its facilities to transmit power
supplied by third-party providers, and thus impairs its
interconnection agreements with several utilities.

This issue was not argued before the PSC. Nevertheless, we
find this issue to be without merit. Consumers’ assertion that
any retail wheeling arrangement would substantially impair its
interconnection agreements is unsubstantiated and speculative. We
have rejected the impairment argument in previous cases. See,
e.g., Antrim Resources v Public Service Comm, 179 Mich App
603, 616-617; 446 NW2d 515 (1989); North Michigan Land &
Oil Corp v Public Service Comm, 211 Mich App 424, 444; 536
NW2d 259 (1995).

Rates

Edison argues that the PSC has fixed unlawful and unreasonable
rates. The PSC’s adoption of an embedded costs approach to
calculate capacity reservation charges results in rates that do
not provide just compensation for the taking of its property. The
embedded costs approach is used appropriately when all of a
utility’s assets are valued for purposes of setting a single
requested rate. However, in the context of retail wheeling,
customers can purchase electricity at unregulated rates. Under
such circumstances, assets should be valued according to market
forces. Such a valuation is best determined through use of the
reproduction cost methodology.

We disagree. Rates must be just and reasonable. The PSC’s
ratemaking authority operates in a broad "zone of
reasonableness." Michigan Bell Telephone Co v Public
Service Comm, 332 Mich 7, 26, 35-36; 50 NW2d 826 (1952). The
retail wheeling program authorized by the PSC is experimental in
nature. Rates established in an experimental program are not
reviewed under the same strict standards as are rates in a
permanent program. Great Lakes Steel v Public Service Comm,
130 Mich App 470, 481-482; 344 NW2d 321 (1983). While testimony
regarding the appropriate cost approach differed, the PSC was
entitled to choose between differing views. Great Lakes Steel,supra. The PSC’s order adopting the embedded costs
valuation method does not result in rates that are unjust or
unreasonable.